Labour Market Participation of Women in Rural Bangladesh: The Role of Microfinance

Abstract

Using a large panel dataset on the labour supply behaviours of women and men within households in rural Bangladesh, we find robust evidence that the effects of microfinance on the labour supply are not symmetrical for women and men across different occupations. We also find that giving households access to microfinance helps to smooth out the seasonality in the labour supply via on-farm self-employment-based activities. Within households, the male members’ participation in off-farm activities increased significantly, while the women’s improved but still remained at a low level. Overall, the results suggest that microfinance improves labour market activities for men more than for women, even though the credit is targeted mainly at women.